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Big Payouts Not Appropriate for Pure Needs in Big Money Divorces

Friday, 14 December 2012

Recent tabloid headlines and divorce court history are littered with staggering payouts being handed to wives who have divorced their wealthy husbands. However, the ‘rules’ in these cases are far from clear and the attitude of the courts do appear to be shifting. The Law Commission is also in the process of carrying out a consultation on the matter of divorce settlements but a report will not be published until 2013.

Highlighting the evolution of judicial attitudes in this area are the recent comments by Lord Justice Thorpe in the Court of Appeal who suggested that big payouts in big money divorces unrelated to pure needs should be consigned to history.

Davies v Davies – The Hotel Owner Big Money Divorce Case

Andrew Morris Davies and his two sisters had inherited a hotel in Bayswater, West London from their parents. In 1997 Mr Davies met a woman whom he later married in 2005 and with whom he eventually had two children. Mr Davies and Debra Ann Davies were married for four years before they decided to split up in 2009.

During their marriage Mr Davies bought out his sisters’ shares in the hotel and, along with Mrs Davies, worked hard to turn it into a thriving business. Mrs Davies worked alongside Mr Davies for a period of 13 years both as a couple and as husband and wife. The disintegration of their marriage led to Mrs Davies seeking a court settlement in respect of the assets; the most significant of which was the hotel.

Pure Needs

In the initial judgement, Judge O’Dwyer assessed Mrs Davies claim at £1.55 million on the basis of pure needs. This amount was then increased to £2.7 million due to Mrs Davies contribution to the improvement and success of the hotel. The judgement included the family home in Acton.

Mention of Needs ‘Completely Inappropriate’

Mr Davies appealed the case which went before Lord Justice Thorpe, Lord Rimer and Lord Justice Elias. In the appeal hearing, Lord Justice Thorpe drew particular attention to how pure needs had been considered in the lower court. He stated that the mention of pure needs was completely inappropriate in cases where there were significant assets involved such as this.

The implications of Lord Justice Thorpe’s statement were that maintenance of the affluent lifestyles of those divorcing wealthy partners is unrelated to their actual pure needs. In his words there should only be a discussion of needs when, ‘there isn’t a lot to go round’. The Court of Appeal’s final decision will follow in due course.

If you would like to discuss the implications of this case or other you need advice in relation to other family law issues please contact Melanie Bataillard-Samuel via e-mail or by telephone on 0207 611 4848.

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